ABSTRACT Type 1 diabetes is characterized by destruction of insulin-producing pancreatic beta cells and is one of the most common metabolic diseases in children (cdc.gov). Current therapies to treat type 1 diabetes include insulin supplementation and, more recently, transplant of pancreatic islets from deceased donors. However, insulin treatment is expensive, intrudes on day-to-day life, and can lead to poor glycemic control. Although pancreatic islet transplantation is more effective at treating diabetes, donor organs are rare and patients must take immunosuppressive drugs, heightening their risk for infection. To address these therapeutic limitations, protocols have been established to generate insulin-producing pancreatic beta cells from human pluripotent stem cell (hPSCs) in vitro. However, hPSC-derived beta cells do not achieve the full functional insulin responsiveness of their in vivo counterparts in vitro and exhibit a fetal-like phenotype, limiting their usefulness. This data suggests that some aspects of normal development are not properly recapitulated in vitro systems and that improper gene regulation leads to expression of lineage inappropriate genes and a reduction in the expression of genes required for adult function. One mechanism cells use to spatio-temporally restrict gene expression and to permanently shut down lineage inappropriate genes is by regulating heterochromatin (HC). HC is a structural element of the mammalian genome associated with methylation of histone 3 lysine (H3K9me3) and characterized by a dense structure that suppresses gene expression. Four lines of evidence from our lab suggest a strong role of HC dynamics during cell differentiation and functional maturation. First, analysis of HC state during mouse embryogenesis revealed a global increase in HC during early development that peaked at germ layer specification. Subsequent differentiation into liver and pancreatic lineages led to lineage specific decreases in HC. Second, a comparison of H3K9me3 and sonication resistant condensed heterochromatin (srHC) showed that 5,632 genes gained and 4,879 genes lost HC compaction between endoderm and mature beta cells during mouse development. Third, liver lineage specification was perturbed by knockout of 3 H3K9me3 conferring proteins, and disruption of HC after birth led to defective hepatocyte maturation. Finally, our lab has identified over 103 HC-associated proteins and has showed that knockdown of 80 of these HC-associated proteins using an siRNA screen improved direct reprogramming of fibroblasts to a liver lineage. Despite strong evidence for a role for HC dynamics in fate specification and maturation, the epigenetic mechanisms regulating expression of beta cell specific genes during functional maturation are unknown. The goal of this proposal is elucidate the natural dynamics of heterochromatin loss during beta cell maturation in vivo in mice and to use this information to improve the functional maturation of pluripotent stem cell-derived pancreatic beta cells in vitro.